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The repercussions of hiding assets in a divorce

Some people have a lot to lose in the property distribution phase of divorce, which can make it tempting to attempt to hide assets from the court in order to protect them from division. However, the Federal Rules of Civil Procedure expressly prohibit such tactics, declaring that anyone who signs a court document is attesting to its truth. As such, violating the FRCP by lying about one's assets during a divorce can result in serious consequences.


In a landmark 1992 case, a Michigan man purposefully hid assets from the court before his divorce. The court eventually discovered the missing assets, determined that the man had deliberately failed to report them and ordered that a new partial trial be conducted in order to reevaluate the case's property division phase. The court eventually awarded all of the newly-discovered assets to the wife, a decision that was reinforced by the Supreme Court. The court also ordered the man to pay 70 percent of his ex-wife's legal fees to make up for the increased time in court.

In all contested and uncontested divorces, both spouses are required to sign a financial affidavit that details all of their expenses, revenue, debts and asset. Parties even must list stock options given by an employer even if they were never specifically asked about stock options. Knowingly signing a financial affidavit puts one at risk for perjury charges and thus carries serious penalties. As in the Michigan case, a judge could order that one's claims be dismissed and reassessed by the court or could rule that the lying spouse pay the entirety of the other's attorney fees and additional fines. In serious cases, lying on an affidavit could result in a criminal trial and eventual incarceration.

Employing a qualified family law attorney allows one to better defend against a property division ruling based on false information. Divorcing Michigan residents who believe their spouses may be attempting to hide assets should consult with a legal professional immediately to ensure their rights are protected.

Source: Forbes, "What Are the Consequences Of Hiding Assets During Divorce?" Jeff Landers, Nov. 14, 2012

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